ANALYSIS: German doubts linger

Germany’s government has confirmed what it had been acknowledging silently off the record for weeks.

Efforts to reach a deal before September federal elections over proposals for harsh cuts to renewables support have failed. No consensus is to be expected.

At first, that looks like good news. Industry fears that the federal government may somehow still push through some of the measures, such as an across-the-board cut to onshore wind feed-in tariffs, or a five-months moratorium before any FIT’s are paid, can rest – for now.

Yet plenty of damage has already been done.

Even if companies can now be a bit calmer over their planning, at least until the elections, financing institutions will be harder to convince that things are back to normal in Germany.

In particular, foreign banks or investors have told companies that they remain hesitant to put money into German projects, especially costly offshore wind parks, before a new government has made its priorities for renewables clear.

However, the outcome of the elections, and with it the set-up of the new government, is wide-open. And as the heated debate of the past months showed, opinions about how to support renewables, if at all, diverge greatly across the main parties in Europe’s biggest economy.

In the four months until the elections, much Green porcelain can still be shattered by politicians trying to elevate their profile.

Environment minister Peter Altmaier and economics minister Philipp Rösler are licking their wounds after being unable to push their FIT-cut plans through before the summer as planned.

But both are likely to blame the Social-Democrat and Green opposition for being insensitive to the needs of poorer Germans by having blocked their ideas to cut FITs in order to contain electricity prices.

Associating clean energy only with costs would be a bad thing for renewables in Germany, taking away some of the momentum for them that has been built up in the wake of the country’s move away from nuclear power after the Fukushima disaster in 2011.

The government for now has delegated the discussion on renwables support to a tooth-less forum within the environment ministry. But a reform of Germany’s renewables legislation will be a task a new government will have to face – no matter which parties will form it.